# EUR-Lex - 52013PC0293 - EN

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# 52013PC0293

**Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on granting an EU guarantee to the European Investment Bank against losses under financing operations supporting investment projects outside the Union /* COM/2013/0293 final - 2013/0152 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

The European Union provides a budgetary
guarantee to the European Investment Bank (EIB) covering risks of a sovereign
and political nature in connection with its financing operations carried out
outside the Union in support of the Union's external policy objectives. The EU
guarantee for the EIB's external operations is an effective means to combine EU
budgetary funds, through the provisioning of the Guarantee Fund for external
actions, with EIB own resources. In addition, the EIB finances investment grade
operations outside the Union at its own risk, as well as activities under
specific mandates such as in ACP countries.

The need for an EU budget guarantee for the
EIB's external operations stems from the Bank's obligation under its Statute to
ensure adequate security for all its lending operations and, more broadly, from
the need to safeguard the creditworthiness of the EIB and not compromise its task
of contributing to the steady development of EU Member States. The EU guarantee
has been the key instrument ensuring the compatibility between the EIB's
financial structure, which is significantly more leveraged than other
International Financial Institutions (IFIs), and the significantly higher
inherent risk of lending to third countries, taking into account the need to
avoid a deterioration of the Bank's AAA rating whilst limiting the EIB capital
consumption. While the recently approved EIB capital
increase would allow to increase EIB lending inside EU, EIB external activity
should not be affected.

The overall scope and general conditions of
the EU guarantee coverage for EIB external operations are set out in decisions
of the European Parliament and of the Council. The most recent decision
covering the EIB financing operations outside the Union over the period
beginning on 1 February 2007 and ending on 31 December 2013 was established by
Decision No 1080/2011/EU of the European Parliament and of the Council of 25
October 2011[1]
(the ‘current Decision’). Article 16 of the current Decision requires the
Commission to present to the European Parliament and to the Council a proposal
for establishing the EU guarantee under the next multiannual financial
framework.

In this context, Recital 40 of the current Decision
foresees specific requirements: "When submitting the proposal on the EU guarantee under the next
multiannual financial framework, the Commission should be invited in particular
to examine, in close cooperation with the EIB and taking into account the
implications of the provisioning of the Guarantee Fund, the ceilings covered by
the EU guarantee, the list of potentially eligible countries and the
possibility for the EIB to provide micro-credit financing and other types of
instruments. The Commission and the EIB should also examine the possibilities
of enhancing, in the future, synergy between the financing through the IPA, the
ENPI, the DCI, the EIDHR and the Instrument for Stability and the external
mandate of the EIB".

The proposed new decision will cover the EU
guarantee for EIB external financing operations over the period beginning on 1
January 2014 and ending on 31 December 2020.

2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS

The Commission carried out an Impact
Assessment (IA)[2]
which accompanies this proposal. The following policy options were considered:

·
No new EU budget guarantee extended to any new EIB
operations outside the Union (option 0).

·
A base line scenario with no change in the
existing EU guarantee which would remain applicable as such in the next mandate,
i.e. until 31/12/2020 (option 1).

·
Adapting the current set-up of the existing
mandate with a combination of amendments responding to the new policy context. Three
sub-options have been defined:

–
Sub-option 2.1 (CLOSE) amending the geographical
scope of the mandate in order to focus the EU guarantee on closest regions
neighbouring the Union by excluding Asia, Latin America and South Africa from
the geographical scope, extending the guarantee to all type of microfinance
operations, substantially increasing the dedicated climate change envelope, and
drafting of annual country strategy papers.

–
Sub-option 2.2 (MICRO) maintaining the current
geographical scope, creating a microfinance mandate which would benefit from an
EU comprehensive guarantee, introducing targets for climate change financing
within the regional envelopes, and updating technical operational regional
guidelines in line with the multiannual indicative programming of EU external
financial instruments.

–
Sub-option 2.3 (FOCUS) focusing the mandate on
less credit-worthy beneficiaries, microfinance operations continuing not to be
explicitly eligible, introduction of an overall signature target accompanied by
the introduction of a tracking system allowing to monitor absolute and relative
Green House Gas emission reduction of all EIB projects supported under the
mandate, and updating technical operational regional guidelines in line with the
multiannual indicative programming of EU external financial instruments.

·
Provide the guarantee to other European
Financial Institutions which are eligible in the various blending facilities
(option 3).

The following main impacts have been
acknowledged:

Option 0 would lead to a withdrawal of the
EIB from a number of countries and a significant increase in funding costs for investment
projects located in these countries. This is deemed not to be politically
desirable in particular in the context of the global economic crisis which
emphasises the significant investment needs. It seems essential to continue
preserving an adequate investment flow to countries outside the Union.

Option 1 would not respond
to the new policy context.

It was acknowledged that sub-option 2.3 (FOCUS)
would bring more positive impacts and ranked better than the other sub-options MICRO
and CLOSE analysed, in particular in terms of budgetary impact and coherence and
complementarity to the Union policies and instruments.

Option 3 would open the EU guarantee to
other institutions and would therefore decrease the share of EIB guaranteed
lending, which could have a negative impact on the visibility of EU action,
given the EIB's EU institutional standing. Moreover, the EU budget would assume
additional contingent liabilities on financing operations conducted by other financial
institutions which are not strictly part of the EU institutional constellation
and do not have the same shareholders. Finally, the other institutions have
their own strategies agreed by their respective governing bodies which could
limit the influence of the Union through its guarantee.

The preferred option is therefore the
sub-option 2.3 (FOCUS).

The impact assessment was based on informal
exchanges of views with key external stakeholders including representatives of
Member States and main relevant NGOs' representatives, which were organised
through meetings and seminars in June and October 2012 in order to take stock
of the state of play of respective reflections. In particular, exchanges of
views were undertaken on the problems identified in this report as well as on
the options envisaged to address them. The IA report was also based on the widespread
consultations of key stakeholders (those affected by the current Decision,
those involved in its implementation and of the legislators) that took place in
the context of the revision of the mandate 2007-2013 concluded at end-2011. All
these consultations and informal exchanges of views provided sufficient ground
to form a view on the position of external stakeholders.

Details on the main outcome of these
consultations are provided in the Impact Assessment report.

Following a first request for resubmission,
the IA Board delivered a positive opinion on the draft IA report on 29 January
2013. The IAB requested further clarifications on the status of implementation
of the recommendations of the mid-term review and on EIB's role within EU
financing for external action and in complementarity to other actors' activity,
further improvements of the assessment of impacts and comparison of options
sections, as well as more details on the stakeholders' view presentation. The
report was further improved accordingly.

3.           LEGAL ELEMENTS OF THE PROPOSAL

The proposal for a decision of the European
Parliament and of the Council is based on the dual legal basis of Articles 209
and 212 of the Treaty on the Functioning of the European Union. In particular
Article 209(3), in conjunction with Article 208, provides that the EIB is to
contribute, under the terms laid down in its Statute, to the implementation of
the measures necessary to further the objectives of Union development
cooperation policy.

The proposal falls under the exclusive
competence of the Union. The subsidiarity principle therefore does not apply.

The proposal complies with the
proportionality principle, as the EU guarantee has proved to be an efficient
means of covering the political and sovereign risks relating to EIB external
operations carried out in support of the Union external policies. The new EU
guarantee mandate for 2014-2020 will allow the existing efficient and
economically sound practice to continue.

Where possible and relevant, the draft
legislative proposal incorporates the language agreed during the
inter-institutional negotiations and reflected in Decision 1080/2011/EU.

4.           BUDGETARY IMPLICATION

The Guarantee Fund for external actions
("Guarantee Fund" or "GF"), established by Council Regulation
(EC, Euratom) No 480/2009 of 25 May 2009 establishing a Guarantee Fund for
external actions[3],
provides a liquidity cushion for the Union budget against losses incurred on
EIB financing operations and other Union external action, i.e. Macro Financial
Assistance and Euratom loans. The EIB mandate represents more than 90% of the
portfolio covered by the GF.

The GF is endowed by one annual payment
from the EU budget. The provisioning mechanism of the GF which aims at
maintaining the GF at a level of 9% of outstanding loan disbursements creates
therefore de facto a limit in the size of the EIB external mandate covered by
EU budget guarantee. In 2010, an external evaluation of the functioning of the
Guarantee Fund concluded that the 9% provisioning rate was deemed appropriate.

The ceiling proposed is compatible with the
provisioning amounts envisaged in the technical input from the European
Commission to the negotiation of the individual programmes implementing the
next Multiannual Financial Framework sent by the Commission on 27 March 2013 (EUR
1.193 billion for the 2014-2020 Financial Framework in current prices) and is based
on expected patterns of disbursements and reimbursements of guaranteed loans.

The proposal foresees a maximum ceiling of
the EIB financing operations under EU guarantee throughout the period 2014-2020
of EUR 28 bn. This maximum ceiling shall be broken down into two parts: (i) a
fixed ceiling of a maximum amount of EUR 25 billion; and (ii) an optional
additional amount of EUR 3 billion. The activation in whole or in part of this
optional amount and its regional distribution will be decided under ordinary
legislative procedure following a mid-term review.

The more limited size of the fixed ceiling
compared to the current Decision is due to budgetary restraint in the amount of
the provisioning budget line of the Guarantee Fund under the next Multiannual
Financial Framework and is not linked to the current performance and
effectiveness of the scheme or absorption capacity considerations.

The budgetary implications as regards the
provisioning of the Guarantee Fund, including the underlying assumptions, as
well as the human and administrative resources involved in the administration
of the EU guarantee are set out in the legislative financial statement
accompanying the proposal.

5.           OPTIONAL ELEMENTS

On the basis of the outcome of the impact
assessment, the proposal aims to ensure the continuation of the EU guarantee
for EIB external financing for the next financial perspectives 2014-2020,
whilst introducing some changes:

•           Focus the geographical scope of
the mandate on less creditworthy beneficiaries where the use of the guarantee
would display the highest value added.

•           Reinforce the climate change
dimension of the mandate in order to incentivise EIB operations in this key
sector of the Union external action through the introduction of an overall
signature target accompanied by the introduction of a tracking system allowing
to monitor absolute and relative Green House Gas emission reduction of all significant
EIB projects supported under the mandate.

•           Better align EIB financing with
the Union policies and reinforce coherence and complementarity with EU
instruments to more satisfactorily mirror policy developments in a timely
manner through the provision to update the technical operational regional
guidelines in line with the multiannual indicative programming of EU external
financial instruments.

Detailed explanation of the key elements
of the proposal

Article 1 extends the EU guarantee for the
next financial perspective 2014-2020, with the possibility of a six-month
extension to ensure the continuity of EIB financing operations. The EU
guarantee is limited to 65% of the aggregate amount of the EIB outstanding
disbursed amounts plus related amounts (e.g. interest, commissions, and other
possible charges that are due by a guaranteed obligor to the EIB pursuant to a
loan or a guarantee agreement), in line with the current Decision. It stresses
that the EIB uses its own rules and procedures when granting financing covered
by the EU guarantee, but also makes the guarantee coverage conditional on the
EIB financing being carried out in support of the Union external policy
objectives. Compared to the current Decision, the proposal clarifies explicitly
that the EU budgetary guarantee covers loans, loan guarantee and debt capital
market instruments issued for the benefit of investment projects.

Article 2 sets out the ceilings for EIB
financing under EU guarantee (fixed and optional ceilings). The regional
ceilings under the fixed ceiling are detailed in Annex I of the proposed
decision.

Article 3 sets out the general objectives and
principles to be pursued by EIB financing operations covered by the EU
guarantee. These general objectives are local private sector development (in
particular SMEs), development of social, environmental and economic
infrastructure, and climate change mitigation and adaptation. Over the period
covered by the new decision, climate change operations should represent an
average of at least 25% of total EIB financing operations. The EIB shall, in
cooperation with the Commission and following a public consultation, update its
climate change strategy in this regard. Regional integration will be an
underlying objective for all EIB financing activity. Moreover, EIB financing
shall contribute indirectly to the Union development objectives.

Article 4 deals with the list of countries
concerned by the proposal and their potential and actual eligibility. As in the
current Decision, the Commission is empowered to adopt delegated acts to
activate or suspend the actual eligibility for EIB financing under the EU
guarantee for countries listed as potentially eligible countries, while the
modification of the list of potentially eligible countries would require a
separate decision by the legislator. Article 4 also provides for the suspension
of disbursements on existing EIB financing operations benefiting from a
Comprehensive Guarantee in case of suspension of eligibility. Compared to the current
Decision, the eligibility of Myanmar for EIB financing under EU guarantee is
established. This reflects the progress that has been made in the Union's
relations with this country. The more detailed justification for extending the
EU guarantee to EIB financing in Myanmar is set out in the annex of the Impact
Assessment accompanying this proposal. It takes into account the political
situation in the country and the bilateral relations with the Union, the
democracy, human rights and fundamental freedoms situation as well as the
macro-economic situation and investment needs.

Article 8 outlines the nature of the EU
guarantee which will cover risks of a political or sovereign nature for
financing operations entered into by the EIB. It also requires that the EU
guarantee, through an appropriate method, is focussed on EIB financing
operations where the EU guarantee brings significant financial benefits. The
aim of such a method would be to ensure that the EU guarantee coverage is
utilised to the maximum benefit of beneficiaries, e.g. in countries and for
operations that have difficulties in obtaining finance from the capital market
on acceptable terms, while investment grade countries or borrowers may have
access to EIB own risk facilities.

Article 18 provides a mid term review of
the implementation of the mandate by 31 December 2017, based on an external
evaluation.

Annex I sets out the regional ceilings under
the fixed ceiling.

Annex II sets out the list of potentially
eligible regions and countries.

Annex III sets out the list of eligible
regions and countries.

Annex IV presents the regional policy
framework in which EIB operates outside the Union.

2013/0152 (COD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on granting an EU guarantee to the
European Investment Bank against losses under financing operations supporting
investment projects outside the Union

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 209 and 212
thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national parliaments,

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)       In addition to its core
mission of financing investment in the Union, the European Investment Bank
(EIB) undertakes financing operations outside the Union in support of the
Union's external policies. This allows the budget funds of the Union available
to the external regions to be complemented by the financial strength of the EIB
for the benefit of the targeted third countries. In undertaking such financing
operations, the EIB contributes to the general principles and policy objectives
of the Union.

(2)       Article 209(3) of the
Treaty on the Functioning of the European Union (TFEU), in conjunction with
Article 208 thereof, provides that the EIB is to contribute, under the terms
laid down in its Statute, to the implementation of the measures necessary to
further the objectives of Union development cooperation policy.

(3)       With a view to supporting
Union external action, and in order to enable the EIB to finance investments
outside the Union without affecting the credit standing of the EIB, the
majority of its operations outside the Union have benefited from an EU
budgetary guarantee ("EU guarantee") administered by the Commission.

(4)       The latest EU guarantee
for EIB financing operations signed during the period from 1 February 2007 to
31 December 2013 was established by Decision No 1080/2011/EU of the
European Parliament and of the Council of 25 October 2011 granting an EU
guarantee to the European Investment Bank against losses under loans and loan
guarantees for projects outside the Union and repealing Decision No 633/2009/EC[4]. An EU guarantee for EIB
financing operations outside the Union in support of Union policies should be
established for the 2014-2020 multiannual financial framework.

(5)       A list of countries
potentially eligible for EIB financing under the EU guarantee should be
established. It is also appropriate to establish a list of countries actually eligible
for EIB financing under the EU guarantee.

(6)       Myanmar should be added to
both lists following the recent developments which allowed the Union to open a
new chapter in its relations with Myanmar and in order to support the on-going
political and economic reforms in the country.

(7)       In order to reflect
significant policy developments, the list of countries actually eligible for
EIB financing operations under the EU guarantee should be reviewed as
appropriate and the power to adopt acts in accordance with Article 290 TFEU
should be delegated to the Commission in respect of amendments to Annex III to
this Decision. It is of particular importance that the Commission carry out
appropriate consultations during its preparatory work, including at expert
level. The Commission, when preparing and drawing-up delegated acts, should
ensure a simultaneous, timely and appropriate transmission of relevant
documents to the European Parliament and Council.

(8)       In order to cater for the
potential evolution of the actual provisioning needs of the Guarantee Fund in
accordance with Council Regulation (EC, Euratom) No 480/2009 of 25 May 2009
establishing a Guarantee Fund for external actions[5], the maximum ceiling of the EU
guarantee should be broken down into a fixed ceiling of a maximum amount of EUR
25 bn and an optional additional amount of EUR 3 bn.

(9)       The amounts covered by the
EU guarantee in each region should continue to represent ceilings for the EIB
financing under the EU guarantee and not targets that the EIB is required to
meet. The ceilings should be evaluated as part of the mid-term review of this
Decision.

(10)     In order to enhance the
coherence and the focus of the EIB external financing activity on supporting
Union policies, and for the maximum benefit of beneficiaries, Decision No
1080/2011/EU set out general objectives for EIB financing operations across all
eligible regions and countries, i.e. local private sector development, in
particular in support of small and medium‑sized enterprises (SMEs), social
and economic infrastructure and climate change mitigation and adaptation, building
on the comparative strengths of the EIB in areas where it has a well-proven
track record. These objectives should be maintained in this Decision.

(11)     Improving access to
financing for SMEs, including SMEs from the Union investing in the regions
covered by this Decision, can play an essential role in stimulating economic
development and in combating unemployment. In order to effectively reach out to
SMEs, the EIB should cooperate with local financial intermediary institutions
in the eligible countries, in particular to ensure that part of the financial
benefits is passed on to their clients and provide added value compared to
other sources of finance.

(12)     The coverage of the EU
guarantee, which is limited to risks of a sovereign and political nature, is
not sufficient in itself to ensure a meaningful EIB activity in support of
micro-finance. Therefore such activity, where appropriate, should be carried
out in connection with budgetary resources available under other instruments.

(13)     The EIB should continue to finance
investment projects in the areas of social, environmental and economic
infrastructure, and should consider increasing its activity in support of
health and education infrastructure when there is clear added value in doing
so.

(14)     The EIB should also
continue to finance investment projects in support of climate change mitigation
and adaptation, to further the promotion of the Union's climate goals on a
global scale.

(15)     Within the areas covered by
the general objectives, regional integration among countries, in particular economic
integration between Pre-accession countries, Neighbourhood countries and the
Union, should be an underlying objective for EIB financing operations. Within
the aforementioned areas, the EIB should be able to support partner countries
through foreign direct investments by companies from the Union that contribute
to promoting technology and knowledge transfer, providing that due
consideration has been made during the investment projects' due diligence to minimise
the risks that EIB financing operations lead to negative repercussions on
employment in the Union. The EIB should also be encouraged to support foreign
direct investment in partner countries by companies from the Union at its own
risk.

(16)     The practical measures for
linking the general objectives of the EU guarantee and their implementation are
to be set out in regional technical operational guidelines. Such guidelines
should be consistent with the wider Union regional policy framework. The regional
technical operational guidelines should be reviewed and further updated
following the review of this Decision in order to adapt to the developments in the
Union external policies and priorities.

(17)     In accordance with Article
19 of the Statute of the EIB, applications made directly to the EIB for EIB
financing operations to be carried out under this Decision are to be submitted
to the Commission for an opinion on the conformity with relevant EU legislation
and policies. In the event that the Commission delivers a negative opinion on an
EIB financing operation in the framework of the Article 19 procedure, the operation
shall not be covered by the EU guarantee.

(18)     While the EIB's strength
remains its distinctiveness as an investment bank, EIB financing operations
should contribute to the general principles guiding Union external action, as
referred to in Article 21 of the Treaty on European Union (TEU), of promoting
and consolidating democracy and the rule of law, human rights and fundamental
freedoms, and to the implementation of international environmental agreements
to which the Union is a party. In particular, in relation to developing
countries, EIB financing operations should foster their sustainable economic,
social and environmental development, particularly in the most disadvantaged
amongst them, their smooth and gradual integration into the world economy, the
campaign against poverty, as well as compliance with objectives approved by the
Union in the context of the United Nations and other competent international
organisations. While contributing to the implementation of the measures
necessary to further the objectives of Union development cooperation policy in
accordance with Article 209(3) of the Treaty, the EIB should strive to support
indirectly the achievement of the UN's 2015 Millennium Development Goals in all
regions where it is active.

(19)     The EIB activity under this
Decision should support the Agenda for Change proposed by the Commission and be
coherent with the relevant principles of the European Consensus on Development
and the principles of aid effectiveness outlined in the Paris Declaration of
2005, the Accra Agenda for Action of 2008 and the Busan Partnership Agreement
of 2011. Furthermore, it should be coherent with the EU Strategic Framework and
Action Plan on Human Rights and Democracy adopted by the Council on 25 June
2012 and international environmental agreements including biodiversity
commitments. It should be implemented through a number of concrete measures, in
particular by reinforcing the EIB's capacity to appraise environmental, social
and development aspects of investment projects, including human rights and
conflict-related risks, and by promoting local consultation with public
authorities and civil society. In this context, the EIB should implement and
further develop its Results Measurement framework (REM) which provides a
detailed set of performance indicators measuring the economic, environmental, social,
and development impact of its financing operations throughout the lifecycle of
the underlying investment. The implementation of the REM should be evaluated as
part of the mid-term review of this Decision. When carrying out due diligence
in respect of an investment project, the EIB should, where appropriate and in
line with the Union's social and environmental principles, require the investment
project promoter to carry out local consultations and disclose their results to
the public. EIB financing agreements involving public counterparts should
explicitly include the possibility to suspend disbursements in case of revocation
of eligibility under this Decision of the country in which the investment project
takes place.

(20)     At all levels, from
upstream strategic planning to downstream investment project development, it
should be ensured that EIB financing operations comply with and support Union
external policies and the general objectives set out in this Decision. With a
view to increasing the coherence of Union external action, dialogue on policy
and strategy should be further strengthened between the Commission and the EIB,
including the European External Action Service (EEAS). The Memorandum of Understanding
to be revised in 2013 to enhance cooperation and early mutual exchange of
information between the Commission and the EIB at operational level should
continue to be applied. It is of particular importance to have an early
exchange of views between the Commission and the EIB, including the EEAS, as
appropriate, in the process of preparing programming documents in order to
maximise synergies between their activities. The cooperation in relation to the
respect of human rights and conflict prevention issues should also be
reinforced.

(21)     Union external relations
should be supported by new instruments from 2014, including an umbrella
Regulation establishing common rules and procedures for the implementation of
the Union's instruments for external action[6].
With a view to enhancing the coherence of overall Union support in the regions
concerned, opportunities should be seized to combine EIB financing with Union
budgetary resources when and as appropriate, in the form of financial
instruments provided for in Title VIII of Regulation (EU, Euratom) No 966/2012
of the European Parliament and of the Council of 25 October 2012 on the
financial rules applicable to the general budget of the Union and repealing
Council Regulation (EC, Euratom) No 1605/2002[7]
and technical assistance for project preparation and implementation, through
the Instrument for Pre-Accession Assistance II (IPA II)[8], the European Neighbourhood
Instrument (ENI)[9],
the Development Cooperation Instrument (DCI)[10],
the Partnership Instrument for cooperation with third countries[11], the Instrument for the
promotion of Democracy and Human Rights worldwide[12], the Instrument for Stability[13], and the Instrument for
Nuclear Safety Cooperation[14].
Following Decision No 1080/2011/EU, the Commission established an EU Platform
for Blending in External Cooperation with a view to optimising the functioning
of mechanisms for the blending of grants and loans outside the Union.

(22)     In its financing operations
outside the Union that fall within the scope of this Decision, the EIB should
endeavour further to enhance coordination and cooperation with European
Financial Institutions and International Financial Institutions, notably those
participating in the EU Platform for Blending in External Cooperation. This
cooperation includes, where appropriate, cooperation on sector conditionality
and mutual reliance on procedures, use of joint co-financing and participation
in global initiatives, such as those promoting aid coordination and
effectiveness. Such coordination and cooperation should strive to minimise
possible duplication of costs and unnecessary overlap. The tripartite Memorandum
of Understanding between the Commission, the EIB Group and the European Bank
for Reconstruction and Development (EBRD) in respect of cooperation outside the
Union, which allows the EIB Group and the EBRD to act in a complementary way by
relying on their respective comparative advantages, was updated in 2012 to
cover the extension of EBRD's geographical scope to the Mediterranean region
and should continue to be applied. The principles set out in this Decision
should also be applied when EIB financing is implemented through cooperation
agreements with other European Financial Institutions and International
Financial Institutions.

(23)     The EIB should be
encouraged to increase its operations and to diversify its operations outside
the Union without recourse to the EU guarantee so that the use of the EU guarantee
can be focused on countries and investment projects with poor access to the
market, taking into account debt sustainability considerations, where the EU guarantee
therefore provides greater added value. Consequently, and always with the aim
of supporting the objectives of the Union external policies, the EIB should be
encouraged to lend at its own risk, including in support of Union economic
interests, in countries and in favour of investment projects having a sufficient
creditworthiness according to the assessment of the EIB and taking into account
its own risk absorption capacity.

(24)     The EIB should expand the
range of innovative financial instruments it offers, including by focusing more
on developing guarantee instruments. Moreover, the EIB should actively seek to
participate in risk sharing instruments and debt capital market financing of
projects with stable and predictable cash flow generation. In particular, it
should consider supporting debt capital market instruments issued or granted
for the benefit of an investment project carried out in the eligible countries.
In addition, the EIB should increase its provision of loans in local currencies
and issue bonds in local markets, provided that beneficiary countries put in
place the necessary structural reforms, in particular in the financial sector,
as well as other measures to facilitate EIB activities.

(25)     The EIB financing
operations in support of Union external policies should continue to be
conducted in accordance with the principles of sound banking practice. They should
continue to be managed in accordance with the EIB's own rules and procedures, including
appropriate control measures and compliance with the EIB's statement on social
and environmental standards, as well as with the relevant rules and procedures
concerning the Court of Auditors and the European Anti-Fraud Office (OLAF). In
its financing operations the EIB should adequately implement its policies
towards weakly regulated or non-cooperative jurisdictions in order to
contribute to the international fight against tax fraud, tax evasion and
money-laundering.

(26)     The EIB should take
appropriate measures ensuring that, when financing operations subject to the EU
guarantee, the financial interests of the European Union are protected by the
application of preventive measures against fraud, corruption and any other
illegal activities and that OLAF is entitled to conduct on-the-spot checks and
Inspections in the premises of the beneficiaries.

HAVE
ADOPTED THIS DECISION:

Article 1
EU guarantee

1.           The Union shall grant the
European Investment Bank (EIB) a budgetary guarantee for financing operations
carried out outside the Union ("EU guarantee"). The EU guarantee
shall be granted as a global guarantee in respect of payments due to the EIB,
but not received by it, in connection with loans, loan guarantees, and debt
capital market instruments granted for or issued for the benefit of EIB
investment projects that are eligible in accordance with paragraph 2.

2.           Eligible for the EU
guarantee shall be the EIB loans, loan guarantees, and debt capital market
instruments that are granted for or issued for the benefit of investment
projects carried out in eligible countries in accordance with the EIB's own
rules and procedures and in support of the relevant Union external policy
objectives, where EIB financing has been granted in accordance with a signed
agreement which has neither expired nor been cancelled ("EIB financing
operations").

3.           The EU guarantee shall be
restricted to 65% of the aggregate amount disbursed and guaranteed under EIB
financing operations, less amounts reimbursed, plus all related amounts.

4.           The EU guarantee shall
cover EIB financing operations signed during the period from 1 January 2014 to
31 December 2020.

5.           If, on expiry of the
period referred to in paragraph 4, the European Parliament and the Council have
not adopted a decision granting a new EU guarantee to the EIB against losses
under its financing operations outside the Union, that period shall be
automatically extended by six months.

Article 2
Ceilings for EIB financing operations under EU guarantee

1.           The maximum ceiling of the
EIB financing operations under EU guarantee throughout the period 2014-2020
shall not exceed EUR 28 000 000 000. Amounts cancelled shall not count against
the ceiling.

This maximum ceiling shall be broken down into:

(a) a fixed ceiling of a maximum amount of EUR
25 000 000 000;

(b) an optional additional amount of EUR 3 000
000 000.

The activation in whole or in part of the
amount referred to in point (b) and its regional distribution shall be decided
following the mid-term review in accordance with Article 18.

2.           The fixed ceiling referred
to in paragraph 1(a) shall be broken down into regional ceilings and sub-ceilings
as laid down in Annex I. Within the regional ceilings, the EIB shall
progressively ensure a balanced country distribution within the regions covered
by the EU guarantee.

Article 3
General objectives and principles

1.           The EU guarantee shall be
granted only for EIB financing operations which support any of the following
general objectives:

(a)     local private sector development, in
particular support to SMEs;

(b)     development of social, environmental
and economic infrastructure;

(c)     climate change mitigation and
adaptation.

2.           EIB financing operations
carried out under this Decision shall contribute to the general principles
guiding Union external action, as referred to in Article 21 TEU and shall
contribute to the implementation of international environmental agreements to
which the Union is a party.

3.           Regional integration among countries, including
economic integration between Pre-accession countries, Neighbourhood countries
and the Union, shall be an underlying objective for EIB financing operations
within areas covered by the general objectives as defined in paragraph 1.

4.           In developing countries, as
defined in the Organisation for Economic Cooperation and Development (OECD) list
of official development assistance (ODA) recipients, EIB financing operations shall
contribute indirectly to the objectives of the Union policy in development
cooperation as referred to in Article 208 TFEU.

5.           EIB financing operations supporting the objectives
provided for in paragraph 1(a) may include support to investment projects by
SMEs from the Union.

6.           EIB financing operations supporting the objectives
provided for in paragraph 1(b) shall support investment projects in the areas
of transport, energy, including renewable energy, energy systems transformation
enabling a switch to lower carbon intensive technologies and fuels, energy
security and energy infrastructure, including for gas production and transportation
to EU energy market, environmental infrastructure, including water and sanitation
and green infrastructure, information and communication technology, including telecommunications
and broadband network infrastructure, health and education.

7.           EIB financing operations supporting
the objectives provided for in paragraph 1(c) shall support investment projects
in climate change mitigation and adaptation which contribute to the overall
objective of the United Nations Framework Convention on Climate Change, in
particular by avoiding or reducing greenhouse gas emissions in the areas of
renewable energy, energy efficiency and sustainable transport, or by increasing
resilience to the adverse impacts of climate change on vulnerable countries,
sectors and communities. Over the period covered by the Decision, the volume of
these operations shall represent at least 25% of total EIB financing operations.

8.           In line with Union and
international climate change objectives, before the end of 2016, the EIB, in
cooperation with the Commission and following a public consultation, shall
update its climate change strategy as regards EIB financing operations.

Article 4
Countries covered

1.           The list of countries
potentially eligible for EIB financing under EU guarantee is set out in Annex
II. The list of countries eligible for EIB financing under EU guarantee is set
out in Annex III and shall include no countries other than those listed in
Annex II.

2.           The Commission shall be
empowered to adopt delegated acts in accordance with Article 17 concerning
amendments to Annex III. The Commission's decisions shall be based on an
overall economic and political assessment, including aspects related to the
democracy, human rights and fundamental freedoms as well as the relevant
European Parliament resolutions and Council decisions and conclusions.

3.           Delegated acts amending
Annex III shall not affect the EU guarantee coverage of EIB financing
operations signed before the entry into force of those delegated acts, subject
to paragraph 4.

4.           Disbursements on EIB
financing operations benefiting from a Comprehensive Guarantee as referred to
in Article 8(1) shall not be made in countries not listed in Annex III.

5.           The EU guarantee shall
cover only EIB financing operations carried out in eligible countries that have
concluded a framework agreement with the EIB establishing the legal conditions
under which such operations are to be carried out.

6.           The EU guarantee shall not
cover EIB financing operations in a specific country with which the agreement
concerning such operations has been signed after that country's accession to
the Union.

Article 5
Contribution of EIB financing operations to Union policies

1.           The Commission shall
update, together with the EIB, the existing regional technical operational
guidelines for EIB financing operations within one year following the adoption
of this Decision.

The regional technical operational guidelines
shall be consistent with the wider Union regional policy framework set out in
Annex IV. In particular the regional technical operational guidelines shall ensure
that EIB financing under this Decision is complementary to corresponding Union
assistance policies, programmes and instruments in the different regions.

In updating these guidelines, the Commission
and the EIB shall take into account relevant European Parliament
resolutions and Council decisions and conclusions. The EEAS shall also be
consulted on policy issues, as appropriate.

The Commission shall transmit to the European
Parliament and to the Council the updated guidelines, as soon as they are
established.

Within the framework set out by the regional
technical operational guidelines, the EIB shall define corresponding financing
strategies and ensure their implementation.

The regional technical operational guidelines
shall be reviewed following the review referred to in Article 18.

2.           An EIB financing operation
shall not be covered by the EU guarantee in the event that the Commission
delivers a negative opinion on such an operation within the framework of the
procedure provided for in Article 19 of the Statute of the EIB.

Article 6
Cooperation with the Commission and the EEAS

1.           The consistency of EIB
external actions with Union external policy objectives shall be further strengthened,
with a view to maximising synergies between EIB financing operations and Union
budgetary resources, in particular through the updating of the regional
technical operational guidelines referred to in Article 5, as well as through
regular and systematic dialogue and early exchange of information on:

(a)     strategic documents prepared by the Commission
and/or the EEAS as appropriate, such as country and regional strategy papers,
indicative programmes, action plans and pre-accession documents;

(b)     the EIB's strategic planning documents
and investment project pipelines;

(c)     other policy and operational aspects.

2.           The cooperation shall be
carried out on a region-by-region basis, including at EU Delegation level, taking
into consideration the EIB's role as well as the policies of the Union in each
region.

Article 7
Cooperation with other European Financial Institutions and International Financial
Institutions

1.           EIB financing operations
shall be carried out, where appropriate, in cooperation with other European
Financial Institutions and International Financial Institutions in order to
maximise synergies, cooperation and efficiency, to develop jointly innovative
financial instruments, to ensure prudent and reasonable sharing of risks and
coherent investment project and sector conditionality, and in order to minimise
possible duplication of costs and unnecessary overlap.

2.           The cooperation referred
to in paragraph 1 shall be facilitated by coordination between the Commission,
the EIB and the main European Financial Institutions and International
Financial Institutions operating in the different regions, carried out where
appropriate in the context of memoranda of understanding or other Union
regional cooperation frameworks.

Article 8
Coverage and terms of the EU guarantee

1.           For EIB financing
operations entered into with a State, or guaranteed by a State, and for other
EIB financing operations entered into with regional or local authorities, or public
enterprises or institutions owned and/or controlled by a State, where such
other EIB financing operations have an appropriate EIB credit risk assessment
taking into account the credit risk situation of the country concerned, the EU
guarantee shall cover all payments due to the EIB, but not received by it ("Comprehensive
Guarantee").

2.           For the purposes of
paragraph 1, the Palestine is represented by the Palestinian Authority and Kosovo[15] by the Government of Kosovo.

3.           For EIB financing
operations other than those referred to in paragraph 1 and for EIB financing
operations consisting of debt capital markets instruments, the EU guarantee
shall cover all payments due to the EIB but not received by it, where the
non-receipt has been caused by the realisation of one of the following
political risks ("Political Risk Guarantee"):

(a)     non-transfer of currency;

(b)     expropriation;

(c)     war or civil disturbance;

(d)     denial of justice upon breach of
contract.

4.           EIB financing operations
shall focus on investment projects where the EU guarantee brings meaningful
financial value added according to EIB credit risk assessment.

5.           The Commission and the EIB
shall set out in the agreement referred to in Article 13 a method allowing the EIB
to identify, within its external activity, the operations to be financed under
this Decision and the operations to be financed at the own risk of the EIB. The
method shall be based on the creditworthiness of EIB financing operations as
assessed by the EIB, the regions and ceilings as defined in Annex I, the nature
of the counterparty (whether a sovereign/State, a sub-sovereign as referred to in
paragraph 1 or private), EIB risk absorption capacity and other relevant
criteria, including added value of the EU Guarantee.

6.           When the EU guarantee is
called, the Union shall be subrogated to any relevant rights of the Bank in
respect of any obligation in connection to its financing operations, in
accordance with the agreement referred to in Article 13.

Article 9
EIB assessment and monitoring of investment projects

1.           The EIB shall carry out
thorough due diligence and, where appropriate and in line with Union
social and environmental principles, require appropriate local public
consultation, on development-related aspects of investment projects
covered by the EU guarantee.

Where appropriate, the appraisal according to first
subparagraph shall include an assessment of how the capacities of the
beneficiaries of EIB financing can be reinforced throughout the project cycle
with technical assistance.

The EIB's own rules and procedures shall
include the necessary provisions on assessment of environmental and social
impact of investment projects and of aspects related to human rights and
conflict prevention, to ensure that only investment projects that are
economically, financially, environmentally and socially sustainable are
supported under this Decision.

2.           In addition to the ex-ante
assessment of development-related aspects, the EIB shall monitor the
implementation of financing operations. In particular, it shall require the
project promoters to carry out thorough monitoring during project
implementation until completion, inter alia, on the development,
environmental and human rights impact of the investment project. The EIB shall verify
the information provided by the project promoters.

3.           The
EIB monitoring shall also cover the implementation of intermediated operations
and the performance of financial intermediaries in support of SMEs.

4.           The EIB shall establish a comprehensive
tracking system of monitoring relative and absolute greenhouse gas emissions
reduction throughout significant EIB financing operations where emissions are
significant and data is available.

Article 10
Annual reporting and accounting

1.           The Commission shall
report annually to the European Parliament and to the Council on EIB financing
operations carried out under this Decision. The report shall include:

(a)
an assessment of EIB financing operations at
project, sector, country and regional levels;

(b)
an assessment of the application of the method referred
to in Article 8(5);

(c)
an assessment of the added value and the development
impact of EIB financing operations at an aggregated basis and their
contribution to the fulfilment of Union external policy and strategic
objectives, taking into account the regional technical operational guidelines
referred to in Article 5;

(d)
an assessment of the financial benefit
transferred to beneficiaries of EIB financing operations on an aggregated
basis;

(e)
an assessment of the quality of EIB financing operations,
in particular, the extent to which the EIB has taken into account environmental
and social sustainability in the due diligence and monitoring of the investment
projects financed;

(f)
calls on EU Guarantee;

(g)
information on the climate change and
biodiversity financing volumes under this Decision, the impact on absolute and
relative greenhouse gas emission reductions of all significant investments as
defined in the EIB climate change strategy referred to in Article 3 on an aggregated
basis as well as the number of projects assessed against the climate risk;

(h)
a description of the cooperation with the
Commission and other European Financial Institutions and International
Financial Institutions, including co-financing. The report shall in particular
include a breakdown of Union financial resources and resources of other European
Financial Institutions and International Financial Institutions used in
combination with EIB financing, thus giving an overview of the overall
investment supported by EIB financing operations carried out under this
Decision. The report shall also mention the conclusion of new Memoranda of
understanding between the EIB and other European Financial Institutions or International
Financial Institutions having a bearing on EIB financing operations under this
Decision;

(i)
information on the follow up of the functioning
of the Memorandum of understanding between the EIB and the European Ombudsman
in so far as the Memorandum concerns EIB financing
operations covered by this Decision.

2.           For the purposes of the
Commission's reporting referred to in paragraph 1, the EIB shall provide the
Commission with yearly reports on EIB financing operations carried out under
this Decision including all necessary elements allowing the Commission to
report in accordance with paragraph 1. The EIB may also
provide to the Commission additional information relevant for the Council and
the European Parliament to have a comprehensive overview of EIB external
activity.

3.           The EIB shall provide the
Commission with statistical, financial and accounting data on each EIB financing
operation, as well as any additional information necessary to fulfil the
Commission's reporting duties or requests by the Court of Auditors and an
auditor's certificate on the outstanding amounts of the EIB financing
operations. EIB shall also provide the Commission any other necessary documents
in line with the Regulation (EU, Euratom) No 966/2012 of the European
Parliament and of the Council of 25 October 2012 on the financial rules
applicable to the general budget of the Union and repealing Council Regulation
(EC, Euratom) No 1605/2002[16].

4.           For the purposes of the
Commission's accounting and reporting of the risks covered by the EU guarantee,
the EIB shall provide the Commission with the EIB's risk assessment and grading
information concerning EIB financing operations.

5.           The EIB shall provide the Commission,
at least on a yearly basis, an indicative multiannual programme of the planned
volume of signatures of EIB financing operations, so as to ensure compatibility
of the EIB's forecast financing with the ceilings established in this Decision
and for the Commission to ensure appropriate budgetary planning for
provisioning the Guarantee Fund[17].
The Commission shall take account of this forecast when preparing the draft
budget.

6.           The EIB shall continue to
provide the European Parliament, the Council and the Commission with all its
independent evaluation reports which assess the practical results achieved by
the specific activities of the EIB under this Decision and other external
mandates.

7.           The EIB shall provide the
information referred to in paragraphs 2 to 6 at its own expense.

Article 11
Public disclosure of information

1.           In accordance with its own
transparency policy, the EIB shall make publicly available on its website
information relating to:

(a)
all EIB financing operations carried out under
this Decision, in particular indicating whether an investment project is
covered by the EU guarantee;

(b)
unless confidentiality requirements apply, any
memoranda of understanding between the EIB and other European Financial
Institutions or International Financial Institutions having a bearing on EIB financing
operations under this Decision.

2.           The Commission shall make
publicly available on its website information relating to all cases of
recoveries under the agreement referred to in Article 14, unless
confidentiality requirements apply.

Article 12
Non-cooperative jurisdictions

In its financing operations, the EIB shall not
tolerate any activities carried out for illegal purposes, including money
laundering, financing of terrorism, tax fraud and tax evasion, corruption, and
fraud affecting the financial interests of the EU. In particular the EIB shall
not participate in any financing operation implemented in an eligible country
through a foreign non‑cooperative jurisdiction identified as such by the
OECD, the Financial Action Task Force or other relevant international
organisations.

Article 13
Guarantee agreement

The Commission and the EIB shall sign a
guarantee agreement laying down the detailed provisions and procedures relating
to the EU guarantee as set out in Article 8, and shall inform the European
Parliament and the Council accordingly.

Article 14
Recovery of payments made by the Commission

1.           Where the Commission makes
any payment under the EU guarantee, the EIB shall, in the name and on behalf of
the Commission, pursue the recovery of claims for the amounts paid.

2.           No later than the date of signature
of the guarantee agreement referred to in Article 13, the Commission and the
EIB shall sign a separate agreement laying down the detailed provisions and
procedures relating to recovery of claims.

Article 15
Auditing by the Court of Auditors

The EU guarantee and the payments and
recoveries under it attributable to the general budget of the Union shall be
audited by the Court of Auditors.

Article 16
Anti-Fraud measures

1.           The EIB shall inform OLAF
immediately when, at any stage of the preparation, implementation or closure of
projects subject to the EU guarantee, it detects a potential case of fraud,
corruption or other illegal activity that may affect the financial interests of
the EU.

2.           OLAF may carry out
investigations, including on-the-spot checks and inspections, in accordance
with the provisions and procedures laid down in Regulation (EC) No 1073/1999,
Regulation (Euratom, EC) No 2185/96 and Regulation (EC, Euratom) No 2988/95 in
order to protect the financial interests of the European Union, with a view to
establishing whether there has been fraud, corruption or any other illegal
activity affecting the financial Interests of the Union in connection with any
financing operations.

Article 17
Exercise of the delegation

1.           The power to adopt
delegated acts is conferred on the Commission subject to the conditions laid
down in this Article.

2.           The delegation of power referred
to in Article 4 shall be conferred on the Commission for an indeterminate
period of time.

3.           The delegation of power
referred to in Article 4 may be revoked at any time by the European Parliament
or by the Council. A decision of revocation shall put an end to the delegation
of the power specified in that decision. It shall take effect the day following
the publication of the decision in the Official Journal of the European Union
or at a later date specified therein. It shall not affect the validity of any
delegated acts already in force.

4.           As soon as it adopts a
delegated act, the Commission shall notify it simultaneously to the European
Parliament and to the Council.

5.           A delegated act adopted
pursuant to Article 4 shall enter into force only if no objection has been
expressed either by the European Parliament or by the Council within a period
of two months of notification of that act to the European Parliament and to the
Council or if, before the expiry of that period, the European Parliament and the Council have both informed the
Commission that they will not object. That period shall be extended by two
months at the initiative of the European Parliament or of the Council.

Article 18
Mid-term Review

By 31 December 2017, the Commission shall
submit to the European Parliament and the Council a mid-term report evaluating
the implementation of this Decision in the first years accompanied, where
appropriate, by a proposal for its amendment. The report shall draw upon an
external evaluation and contribution from the EIB.

Article 19
Final reporting

By 31 December 2021,
the Commission shall present to the European Parliament and to the Council a
final report on the application of this Decision.

Article 20
Entry into force

This
Decision shall enter into force on the third day following that of its
publication in the Official Journal of the European Union.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX I

REGIONAL
CEILINGS

A.           Pre-accession countries: EUR
8 400 000 000;

B.           Neighbourhood and Partnership
countries: EUR 12 400 000 000, broken down into the following indicative
sub-ceilings:

(i)      Mediterranean countries: EUR 8 400
000 000;

(ii)     Eastern Europe, Southern Caucasus and
Russia: EUR 4 000 000 000;

C.           Asia and Latin America: EUR
3 600 000 000, broken down into the following indicative sub-ceilings:

(i)      Latin America: EUR 2 150 000 000;

(ii)     Asia: EUR 1 200 000 000;

(iii)     Central Asia: EUR 250 000 000

D.           South Africa: EUR 600 000
000.

Within the overall fixed ceiling, the EIB shall,
where appropriate, request the Commission to agree to reallocate an amount of
up to 20 % of the sub-regional ceilings within regions and up to 10 % of the regional
ceilings between regions.

ANNEX II

POTENTIALLY
ELIGIBLE REGIONS AND COUNTRIES

A.           Pre-accession countries

1.      Candidates

Iceland, the former
Yugoslav Republic of Macedonia, Montenegro, Serbia, Turkey

2.      Potential candidates

Albania, Bosnia and Herzegovina, Kosovo

B.           Neighbourhood and Partnership
countries

1.      Mediterranean countries

Algeria, Egypt, Israel, Jordan, Lebanon, Libya,
Morocco, Palestine, Syria, Tunisia

2.      Eastern Europe, Southern Caucasus
and Russia

Eastern Europe: Belarus, Republic of Moldova,
Ukraine

Southern Caucasus: Armenia, Azerbaijan, Georgia

Russia

C.           Asia and Latin America

1.      Latin America

Argentina, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua,
Panama, Paraguay, Peru, Uruguay, Venezuela

2.      Asia

Afghanistan, Bangladesh, Bhutan, Brunei,
Cambodia, China (including Hong Kong and Macao Special Administrative Regions),
India, Indonesia, Iraq, Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal,
Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand,
Vietnam, Yemen

3.      Central Asia

Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan, Uzbekistan

D.           South Africa

Republic of South Africa

ANNEX III

ELIGIBLE
REGIONS AND COUNTRIES

A.           Pre-accession countries

1.      Candidates

Iceland, the former
Yugoslav Republic of Macedonia, Montenegro, Serbia, Turkey

2.      Potential candidates

Albania, Bosnia and Herzegovina, Kosovo

B.           Neighbourhood and Partnership
countries

1.      Mediterranean countries

Algeria, Egypt, Israel, Jordan, Lebanon, Libya,
Morocco, Palestine, Tunisia

2.      Eastern Europe, Southern Caucasus
and Russia

Eastern Europe: Republic of Moldova, Ukraine

Southern Caucasus: Armenia, Azerbaijan, Georgia

Russia

C.           Asia and Latin America

1.      Latin America

Argentina, Bolivia, Brazil, Chile, Colombia,
Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua,
Panama, Paraguay, Peru, Uruguay, Venezuela

2.      Asia

Bangladesh, Brunei, Cambodia, China
(including Hong Kong and Macao Special Administrative Regions), India, Indonesia,
Iraq, Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Pakistan,
Philippines, Singapore, South Korea, Sri Lanka, Thailand, Vietnam, Yemen

3.      Central Asia

Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan,
Uzbekistan

D.           South Africa

Republic of South Africa

ANNEX IV

REGIONAL
POLICY FRAMEWORK

EIB activity in partners participating in
the pre-accession process takes place in the framework established in the
Accession and European Partnerships which set out the priorities for candidates
and potential candidates with a view to making progress in moving closer to the
Union, and which provide a framework for Union assistance. The Stabilisation
and Association Process is the Union policy framework for the Western Balkans.
It is based on progressive partnership, in which the Union offers trade
concessions, economic and financial assistance and contractual relationships
through Stabilisation and Association Agreements. Pre-accession financial
assistance helps the candidates and potential candidates prepare for the
obligations and challenges of membership of the Union. This assistance supports
the reform process, including preparations for eventual membership. It focuses
on institution-building, alignment with the acquis of the Union,
preparation for Union policies and instruments and promotion of measures to
achieve economic convergence.

EIB activity in neighbourhood countries takes
place in the framework of the new European Neighbourhood Policy "A new
response to a changing Neighbourhood’, adopted on 25 May 2011 and the Council
conclusions adopted on 20 June 2011, which calls notably for greater support to
partners committed to building democratic societies and undertaking reforms, in
line with the “more for more” and "mutual accountability" principles,
and provides the strategic policy framework for the EU relations with the
neighbours. In the framework of this cooperation, EIB financing under this
Decision will also be targeted at policies promoting inclusive growth and job
creation contributing to social stability in line with an incentive-based
approach supporting Union external policy objectives, including in relation to
migration issues.

In order to achieve these objectives the
Union and its partners implement jointly agreed bilateral action plans defining
a set of priorities including on political and security issues, trade and
economic matters, environmental and social concerns and integration of
transport and energy networks.

The Union for the Mediterranean, the
Eastern Partnership, the Black Sea Synergy, the Union Strategy for the Danube
Region and the Union Strategy for the Baltic Sea Region are multilateral and
regional initiatives aimed at fostering cooperation between the Union and the
respective group of neighbourhood partner countries facing common challenges and/or
sharing a common geographical environment. The Union for the Mediterranean aims
to relaunch the Euro-Mediterranean integration process by supporting mutual
economic, social and environmental development on both sides of the
Mediterranean and supports improved socio-economic development, solidarity, regional integration, sustainable development and
knowledge building, underlining the need to increase financial cooperation to
support regional and trans-national projects. The Union
for the Mediterranean supports, in particular, the creation of maritime and
land highways, the de-pollution of the Mediterranean, the Mediterranean solar
energy plan, the Mediterranean Business Development Initiative, civil
protection initiatives and the Euro-Mediterranean university. The Union Strategy for the Baltic Sea Region
supports a sustainable environment and optimal economic and social development
in the Baltic Sea region. The Union Strategy for the Danube Region supports, in
particular, the development of transport, energy connections and security,
sustainable environment and socio-economic development in the Danube region. The Eastern Partnership aims to create the
necessary conditions to accelerate political association and further economic
integration between the Union and Eastern partner countries. The Russian
Federation and the Union have a wide-ranging strategic partnership, distinct
from the European Neighbourhood Policy and expressed through the Common Spaces
and Roadmaps. These are complemented at multilateral level by the Northern
Dimension which provides a framework for cooperation between the Union, Russia,
Norway and Iceland (Belarus, Canada and the US are observers to the Northern
Dimension).

EIB activity in Latin America takes place
in the framework of the Union, Latin America and the
Caribbean Strategic Partnership. As highlighted in the
September 2009 Commission Communication "The European Union and Latin
America: Global Players in Partnership", the Union's priorities in the
field of cooperation towards Latin America are the promotion of regional
integration and the eradication of poverty and social inequality in order to
promote sustainable economic and social development. These policy objectives will
be fostered taking into account the different level of development of Latin
American countries. Bilateral dialogue and cooperation will be pursued in
areas of common interest for both regions, including environment, climate
change, disaster risk reduction and energy, science, research, higher education,
technology and innovation.

The EIB is encouraged to be active in Asia,
in particular in less prosperous countries. In this diverse region, the Union
is deepening its strategic partnerships with China and India and negotiations
are progressing on new partnership and free trade agreements with South-East
Asian countries. At the same time, development cooperation remains high on the Union's
agenda with Asia; the Union development strategy for the Asian region aims at
eradicating poverty by supporting broad-based sustainable economic growth,
promoting a conducive environment and conditions for trade and integration
within the region, enhancing governance, increasing political and social
stability, and supporting the achievement of the 2015 Millennium Development
Goals. Policies are being put in place jointly to address common challenges,
such as climate change, sustainable development, security and stability,
governance and human rights, as well as the
prevention of, and response to, natural and humanitarian disasters.

The Union Strategy for a new partnership
with Central Asia adopted by the European Council in June 2007 has strengthened
regional and bilateral dialogue and Union cooperation with Central Asian
countries on major issues facing the region, such as poverty reduction,
sustainable development and stability. The implementation of the strategy has
brought about important advances in the fields of human rights, the rule of
law, good governance and democracy, education, economic development, trade and
investment, energy and transport and environmental policies.

EIB activity in
South Africa takes place in the framework of the Joint EU Country Strategy
Paper for South Africa. The main focal areas identified in that Strategy Paper
are employment creation and capacity development for service delivery and
social cohesion. EIB activities in South Africa have taken place in high
complementarity with the EU development cooperation programme, namely through
the EIB focus on private sector support and investments in expansion of
infrastructure and social services (housing, electric power, drinking water
purification and municipal infrastructure). The mid-term review of the EU
Country Strategy Paper for South Africa conducted in 2009-2010 has proposed the
strengthening of actions in the area of climate-change through activities
supporting the creation of green jobs. For the period 2014-2020, EIB activity
is expected to support in a complementary fashion EU external cooperation
policies, programmes and instruments by continuing to focus on key EU-South
Africa priorities in order to promote equitable and sustainable economic
growth, contribute to employment creation and capacity development, and support
the sustainable provision and equitable access to basic infrastructure and
services

LEGISLATIVE FINANCIAL STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.    Title of the proposal/initiative

1.2.    Policy
area(s) concerned in the ABM/ABB structure

1.3.    Nature
of the proposal/initiative

1.4.    Objective(s)

1.5.    Grounds
for the proposal/initiative

1.6.    Duration
and financial impact

1.7.    Management
method(s) envisaged

2.           MANAGEMENT MEASURES

2.1.    Monitoring
and reporting rules

2.2.    Management
and control system

2.3.    Measures
to prevent fraud and irregularities

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected

3.2.    Estimated
impact on expenditure

3.2.1. Summary of
estimated impact on expenditure

3.2.2. Estimated impact
on operational appropriations

3.2.3. Estimated impact
on appropriations of an administrative nature

3.2.4. Compatibility
with the current multiannual financial framework

3.2.5. Third-party
participation in financing

3.3.    Estimated impact on revenue

LEGISLATIVE FINANCIAL STATEMENT

1.           FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1.        Title of the
proposal/initiative

Proposal for a Decision of the European Parliament and of the
Council granting an EU guarantee to the European Investment Bank against losses
under financing operations supporting investment projects outside the Union

1.2.        Policy area(s) concerned
in the ABM/ABB structure[18]

Policy Area: Title 01 - Economic and Financial Affairs

ABB Activity: International economic and financial affairs

1.3.        Nature of the
proposal/initiative

 ̈ The
proposal/initiative relates to a new action

 ̈ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[19]

X The proposal/initiative relates to the
extension of an existing action

 ̈ The
proposal/initiative relates to an action redirected towards a new action

1.4.        Objectives

1.4.1.     The Commission's
multiannual strategic objective(s) targeted by the proposal/initiative

The general objective of EIB activity outside the Union under the
external mandate is to support the Union's external policies by financing
relevant investment projects in partner countries through the combination of the
EU budget guarantee with EIB own resources.

Through its financing operations outside the Union under the EU
guarantee, the EIB should support the economic, social and environmental
sustainable development of Union partner countries, and their partnership with
the Union.

The general objectives to be sought by EIB financing operations under
the mandate are the following:

(a)      local private sector development, in particular support to
SMEs;

(b)     development of social, environmental and economic
infrastructure;

(c)      climate change mitigation and adaptation.

1.4.2.     Specific ABM objective(s)
and ABM/ABB activity(ies) concerned

Specific ABM objective No.2: "To improve the EU profile, external representation
and liaison with the EIB and EBRD, other international financial institutions,
and relevant economic fora aiming at strengthening convergence between their
strategies and operations and EU external priorities".

ABM/ABB activity(ies) concerned

Title 01.03 – International Economic and Financial Affairs

1.4.3.     Expected result(s) and
impact

An impact assessment has been carried out in conjunction to this
proposal. The main impacts of the proposal have been assessed in the IA report.

1.4.4.     Indicators of results and
impact

A framework to measure the results and impacts of EIB operations has
been developed by the EIB through the operational monitoring of a set of indicators.
The "REsults Measurement framework (REM)[20]
improves the ex-ante assessment of expected project results and enhances the EIB’s
ability to report on actual results achieved. The REM framework serves to show
how EIB loans generate outputs, which enable outcomes and, over time lead to
impacts, which are in line with the Bank’s mandate objectives.

In addition, progress towards specific and operational objectives of
the proposal will be monitored through core indicators as indicated in 2.1.

As regard the financing for projects that promote climate action,
eligibility for climate change operations would be clarified against agreed
criteria building on - and, if needed, tightening - existing EIB definitions to
track climate change expenditure (e.g. introducing benchmarks related with GHG
emission reduction, improving if appropriate the definitions for energy
efficiency and adaptation), which would also be used in the monitoring phase to
'operationalise' the Rio Marker or equivalent system as proposed by the
Commission to track the EU budget under the next MFF.

In parallel the EIB should keep developing methodologies to assess
climate risk in order to reinforce the climate resilience for all relevant
operations, and integrate carbon pricing in economic cost benefit analysis.
Restrictive eligibility and criteria for carbon-intensive projects should also
be improved in relevant sector policies.

1.5.        Grounds for the
proposal/initiative

1.5.1.     Requirement(s) to be met in
the short or long term

Article 16 of Decision 1080/2011/EU states that the Commission shall
present to the European Parliament and the Council a proposal for establishing
the EU guarantee under the next multiannual financial framework (2014-2020).

Under the terms of Decision 1080/2011/EU of the European Parliament
and of the Council, the EU guarantee covers EIB financing operations signed
between 1 February 2007 and 31 December 2013. Therefore, a new Decision should be
adopted under the ordinary legislative procedure before the current mandate
expires[21].

1.5.2.     Added value of EU involvement

EIB financing operations outside the Union represent a highly
visible and effective tool in support of the Union's external action. The main
benefits of EIB intervention in such countries, beyond the financial
contribution, include the passing on to project promoters of expertise and the
application of EU environmental, social and procurement standards to the investment
projects financed. In addition to the above benefits, the EIB passes on in full
the financial advantages resulting from the EU guarantee and the attractive
funding costs of the EIB to final beneficiaries in the form of competitive
interest rates.

The mandate under EU guarantee cover provides for the necessary
political and financial backing by the Union for countries and investment projects
which would not normally fit within EIB's standard guidelines and criteria due
to the higher risk.

1.5.3.     Lessons learned from
similar experiences in the past

The Impact Assessment (IA) prepared for this decision draws from
lessons learned from the implementation of the previous mandates. The new
legislative proposal aims at address the problems identified in the IA report.

1.5.4.     Coherence and possible
synergy with other relevant instruments

EIB financing operations will complement the activities carried out
under the external assistance instruments. In order to further increase support
for the Union external policies in each specific region, the linkage between
EIB priorities and the Union policies will be strengthened. This will be
achieved through the establishment and the mid-term update of regional
technical operational guidelines which will provide a stronger framework for
dialogue and cooperation between the EIB and the Commission. Where appropriate,
EIB financing operations may be usefully combined with EU budget resources in
the form of co-financing grants, risk capital, risk sharing or technical
assistance for project preparation and implementation or enhancement of the
legal and regulatory framework.

1.6.        Duration and financial
impact

x Proposal/initiative of limited
duration

–
x   Proposal/initiative in effect from 01/01/2014
to 31/12/2020

EIB financing operations can be signed by
the EIB from 2014 to 2020. An extension of six months is foreseen if the
European Parliament and the Council have not adopted a decision granting a new
EU guarantee to the EIB for its financing operations outside the Union at the
end of 2020.

–
x   Financial impact from 2014 to undefined

The total duration of the action and of its
financial impact will be determined by the maturity of the signed EIB financing
operations. The final impact will depend on the amount of potential calls and
recovery (see also point 3.2.2 below).

 ̈ Proposal/initiative of unlimited
duration

–
Implementation with a start-up period from YYYY
to YYYY,

–
followed by full-scale operation.

1.7.        Management mode(s) envisaged[22]

X Direct management by the Commission

Comments

In line
with existing provisions, the proposal foresees that the EIB finances investment
projects in accordance with its own rules and procedures. The Commission is
responsible for managing directly the EU guarantee. The EIB and the Commission
enter into a guarantee and a recovery agreements laying down the detailed
provisions and procedures relating to the implementation of the proposed
Decision.

2.           MANAGEMENT MEASURES

2.1.        Monitoring and reporting
rules

EIB financing operations under EU guarantee will be managed by the
EIB in accordance with the EIB's own rules and procedures, including
appropriate audit, control and monitoring measures.

Furthermore, the EIB Board of Directors, where the Commission is
represented by a Director and an alternate Director, approves each EIB financing
operation and monitors that the EIB is managed in accordance with its Statute
and with the general directives laid down by the Board of Governors.

The existing tripartite agreement between the Commission, the Court
of Auditors and the EIB of October 2003 (and agreed to be renewed for four
years in 2007 and again in 2011) details the rules under which the Court of
Auditors is to carry out its audits on the EIB financing operations under EU
guarantee.

Regular reports are envisaged in the proposal as in Decision No 1080/2011/EU.
The Commission will annually report on the implementation of the mandate by the
EIB to the European Parliament and the Council.

Reporting on results will be based on an appropriate aggregation of
indicators across the entire portfolio where this is possible, or across a
given sector. These indicators will be measured throughout the project cycle at
appraisal level and during monitoring until the project is fully implemented as
soon as the first development outcomes are measurable - typically up to three
years after project completion. They will, to the extent possible, also be used
for ex-post evaluation. These indicators should cover the following areas: i)
amount signed by region, ii) amount disbursed by region, iii) progress in
achieving a balanced distribution of activity by country, iv) breakdown of
activity across the various objectives, v) volume of climate change lending against
target financing and impact on absolute and relative GHG emission reductions,
vi) number of projects assessed against climate risk, vii) number and amount of
operations blended with EU grants, and viii) number and amount of operations
co-financed with other IFIs.

Furthermore, the EIB shall provide the Commission with statistical,
financial and accounting data on each of the financing operations covered by the
EU guarantee as necessary to fulfil its reporting duties or requests by the
European Court of Auditors as well as an auditor’s certificate on the
outstanding of the Financing Operations covered.

A mid-term evaluation will be carried out after three years from the
start of the mandate.

2.2.        Management and control
system

2.2.1.     Risk(s) identified

The risk for the EU budget is linked to the budget guarantee
provided by the Union to the EIB for its operations in third countries. The
guarantee provides a comprehensive cover for all payments not received by the
EIB under sovereign and sub-sovereign operations and only political risk cover
for other operations with a sharing of risk between the Union and the EIB. In
any case, the EU guarantee is restricted to 65 % of the aggregate amount of
credits disbursed and guarantees less amounts reimbursed, plus all related
amounts.

The budget entry ("p.m.") reflecting the budget guarantee
for the EIB loans to third countries would be activated only in the case of an
effective call on the guarantee by the EIB which cannot be wholly covered by
the Guarantee Fund. Although such recourse to the budget (i.e. beyond the Guarantee
Fund amounting to EUR 2,002 mn on 31 December
2012) is considered to be highly unlikely, the comments associated with the
budgetary line reflect the financing needs which could arise in the event of a payment
request by the EIB relating to a default covered by the EU guarantee.

In 2012 and early 2013, the Guarantee Fund was called to cover
defaults on loans in Syria. In the yearly reports from the Commission to the EP
and to the Council on guarantees covered by the general budget, country risk
indicators are analysed and indicate the evolution of risk of defaults. The
report provides information on quantitative aspects of the risk borne by the EU
Budget. However, the quality of the risks depends on the type of operation and
the standing of the borrowers. The risk assessment in the report is based on
the information on the economic and financial situation, ratings and other
known facts of the countries having received guaranteed loans.

2.2.2.     Control method(s) envisaged

The Commission is responsible for managing the EU guarantee. EIB financing
operations in the context of the proposed Decision will be carried out
according to EIB standard rules of procedure and sound banking practice. The
EIB and the Commission enter into an agreement laying down the detailed
provisions and procedures relating to the implementation of the proposed
Decision. See also 2.1.

2.3.        Measures to prevent fraud
and irregularities

The EIB has the main responsibility for the adoption of fraud
prevention measures, notably through the application to the financing operations
of the "EIB’s Policy on preventing and deterring Corruption, Fraud,
Collusion, Coercion, Money Laundering and the Financing of Terrorism in
European Investment Bank activities" currently under revision. The EIB has
adopted a policy towards weakly regulated, non-transparent and non-cooperative
jurisdictions in December 2010.

Moreover, Article 17 of the Decision foresees the implementation of
Anti-Fraud measures.

3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE

3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected

· Existing expenditure budget lines

In order of
multiannual financial framework headings and budget lines.

Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution

Number [Description........................................] || Diff./non-diff. ([23]) || from EFTA[24] countries || from candidate countries[25] || from third countries || within the meaning of Article 18(1)(aa) of the Financial Regulation

4 || 01.0305 EU guarantee for EIB loans and loan guarantees for operations in third countries 01.0306 Provisioning of the Guarantee Fund || Diff/ Non diff. || NO NO || NO NO || NO NO || NO NO

3.2.        Estimated impact on
expenditure

3.2.1.     Summary of estimated impact
on expenditure

EUR million

Heading of multiannual financial framework: || Number || Heading 4

DG: ECFIN || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || 2018-2020 || TOTAL

Ÿ Operational appropriations || || || || || || || ||

Number of budget line 01 0305 || Commitments || (1) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Payments || (2) || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m. || p.m.

Number of budget line 01 0306 || Commitments || (1a) || 58.482 || 239.759 || 272.664 || 199.039 || 178.055 || 159.750 || 84.820 || 1192.569

Payments || (2a) || 58.482 || 239.759 || 272.664 || 199.039 || 178.055 || 159.750 || 84.820 || 1192.569

Appropriations of an administrative nature financed  from the envelope for specific programmes[26] || || || || || || || ||

Number of budget line 01 0306 || || (3) || 0 || 0 || 0.5 || 0. || 0 || 0 || 0 || 0.5

TOTAL appropriations for DG ECFIN || Commitments || =1+1a +3 || 58.482 || 239.759 || 273.164 || 199.039 || 178.055 || 159.750 || 84.820 || 1193.069

|| Payments || =2+2a +3 || 58.482 || 239.759 || 273.164 || 199.039 || 178.055 || 159.750 || 84.820 || 1193.069

Ÿ TOTAL operational appropriations || Commitments || (4) || 58.482 || 239.759 || 272.664399 || 199.039 || 178.055 || 159.750 || 84.820 || 1192.569

Payments || (5) || 58.482 || 239.759 || 272.664 || 199.039 || 178.055 || 159.750 || 84.820 || 1192.569

Ÿ TOTAL appropriations of an administrative nature financed from the envelope for specific programmes || (6) || 0 || 0 || 0.5 || 0 || 0 || 0 || 0 || 0.5

TOTAL appropriations under HEADING 4 of the multiannual financial framework || Commitments || =4+ 6 || 58.482 || 239.759 || 273.164 || 199.039 || 178.055 || 159.750 || 84.820 || 1193.069

Payments || =5+ 6 || 58.482 || 239.759 || 273.164 || 199.039 || 178.055 || 159.750 || 84.820 || 1193.069

Heading of multiannual financial framework: || 5 || " Administrative expenditure "

EUR million

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || 2018-2020 || TOTAL

DG: ECFIN ||

Ÿ Human resources || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 6.419

Ÿ Other administrative expenditure || || || || || || || ||

TOTAL DG ECFIN || Appropriations || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 6.419

TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 6.419

EUR million

|| || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || 2018-2020 || TOTAL

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 59.399 || 240.676 || 274.081 || 199.956 || 178.972 || 160.667 || 85.737 || 1199.488

Payments || 59.399 || 240.676 || 274.081 || 199.956 || 178.972 || 160.667 || 85.737 || 1199.488

3.2.2.     Estimated impact on
operational appropriations

–
 ̈  The proposal/initiative does not require the use of operational
appropriations

–
X  The proposal/initiative requires the use of
operational appropriations, as explained below:

Commitment appropriations in EUR million (to 3 decimal
places)

Indicate objectives and outputs ò || || || Year 2014 || Year 2015 || Year 2016 || Year 2017 || 2018-2020 || TOTAL

OUTPUTS

Type of output[27] || Average cost of the output || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Number of outputs || Cost || Total number of outputs || Total cost

SPECIFIC OBJECTIVE No 1[28]... || || || || || || || || || || || || || || || ||

- Output || || || || || || || || || || || || || || || || || ||

- Output || || || || || || || || || || || || || || || || || ||

- Output || || || || || || || || || || || || || || || || || ||

Sub-total for specific objective N°1 || || || || || || || || || || || || || || || ||

SPECIFIC OBJECTIVE No 2"To improve the EU profile, external representation and liaison with the EIB and EBRD, other international financial institutions, and relevant economic fora aiming at strengthening convergence between their strategies and operations and EU external priorities". || || || || || || || || || || || || || || || ||

- Output || || || 1 || 58.482 || 1 || 239.759 || 1 || 272.664 || 1 || 199.039 || 1 || 178.055 || 1 || 159.750 || 1 || 84.820 || 7 || 1192.569

Sub-total for specific objective N°2 || || || || || || || || || || || || || || || ||

TOTAL COST || || 58.482 || || 239.759 || || 272.664 || || 199.039 || || 178.055 || || 159.750 || || 84.820 || || 1192.569

The estimated
impact on operational appropriations can be summarised as follows:

•           01 0305 - "EC guarantee
for EIB loans and loan guarantees for operations in third countries'"

The budget entry ("p.m.")
reflecting the budget guarantee for the EIB loans to third countries will be
activated only in the case of an effective call on the guarantee which cannot
be wholly covered by the Guarantee Fund.

•           01 0306 – "Provisioning of
the Guarantee Fund"

The Guarantee Fund for external actions has
to be provisioned according to the Guarantee Fund Regulation (Council Regulation
(EC, Euratom) No 480/2009). In line with this Regulation, loans are provisioned
on the basis of the outstanding amount at the end of a year. The provisioning
amount is calculated at the beginning of the year "n" as the
difference between the target amount (9% of the outstanding amount) and the
Fund's net assets at the end of the year "n-1". This provisioning
amount is introduced in the year "n" to the "n+1"
preliminary budget and effectively paid in one transaction at the beginning of
the year "n+1" from budget line 01 0306.

The Guarantee Fund also covers
Macro-financial Assistance and Euratom loans which fall outside the scope of
the proposed Decision. Therefore, the estimated budgetary needs take into
account existing signed operations as well as potential new operations under
these two activities. The effective annual needs for provisioning of the
Guarantee Fund in 2014-2020 will ultimately depend on the actual rhythm of
signatures, disbursements and reimbursement of the loans on the three activities,
as well as the evolution of the Guarantee Fund assets.

The table below highlights the expected
external action activities covered by the Guarantee Fund for the period
2012-2020 (volume of signatures and disbursements of loans).

External action activities covered by the Guarantee Fund and Guarantee Fund assets 2012-2020 (EUR ml)

||   || || || || || || || || || ||

|| || || 2012 || 2013 || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020

|| || || || || || || || || || ||

(A) Indicative volume of signed EIB financing operations (New Decision 2014-2020 - Total of fixed ceiling = EUR 25,000 million) || 3 959 || 4 450 || 3 600 || 3 600 || 3 600 || 3 550 || 3 500 || 3 550 || 3 550

(B) Outstanding disbursed amount of EIB operations based on estimated disbursements and amortisations (old and new Decisions) || 22 526 || 25 826 || 29 098 || 31 685 || 34 024 || 35 600 || 37 187 || 38 274 || 39 533

(C) Outstanding disbursed amount of other operations based on estimated disbursements and amortisations (MFA+ Euratom) || 573 || 1 310 || 2 187 || 2 266 || 2 336 || 2 204 || 1 725 || 1 230 || 907

(D) = (B) + (C) || Total outstanding disbursed amount based on estimated disbursements and amortisations || 23 099 || 27 136 || 31 285 || 33 951 || 36 360 || 37 804 || 38 912 || 38 504 || 40 440

|| || || || || || || || || || ||

Notes: || (C) These figures include new possible MFA and Euratom loans. || || || || || ||

||

While the lending volumes should be
compatible with the overall provisioning foreseen for the Financial Framework,
annual needs for the provisioning of the Guarantee Fund could vary as they will
eventually be calculated on the basis of the total outstanding disbursed amount
at the end of year n-2. Should the annual needs in a
future year exceed the foreseen provisioning amount for that year, the
additional contribution will principally come through a reallocation from the
financing instruments incorporating geographical programming, especially in
case of activation of the optional additional ceiling. The budgetary impact of the possible activation
of the optional additional ceiling would have to be calculated on the basis of
updated forecasts on provisioning needs at the time of the mid-term review.

The expected needs for 2014-2020 take account of the impact of existing calls on
Syrian defaulted loans having taken place in 2012 and early 2013, as well as further
expected calls during two years after the adoption of this proposal, if the
default situation persists over these years. However, they do not take into
account the exceptional budgetary needs such as further possible defaults on
payments by other loan beneficiaries which may occur, or adjustments of the
valuation of the Fund's assets. It is indeed difficult
to estimate potential further defaults on payments. It should be recalled that,
according to the Guarantee Fund Regulation, the replenishment of the Fund is a
compulsory expenditure which would require, in case of unexpected defaults, the
recourse to other Heading 4 resources.

The semi-annual Commission reports to the
European Parliament and the Council on guarantees covered by the general budget
allow for the factoring in of the maximum risks covered by the budget (cf. the
report [COM(2013)211 and the accompanying staff working document SWD(2013)130 - Situation at 30 June 2012]).

3.2.3.     Estimated impact on
appropriations of an administrative nature

3.2.3.1.  Summary

–
 ̈  The proposal/initiative does not require the use of administrative
appropriations

–
X  The proposal/initiative requires the use of
administrative appropriations, as explained below:

EUR million (to 3
decimal places)

|| Year 2014 || Year 2015 || Year 2016 || Year 2017 || 2018-2020 || TOTAL

HEADING 5 of the multiannual financial framework || || || || || || || ||

Human resources || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 6.419

Other administrative expenditure || || || || || || || ||

Subtotal HEADING 5 of the multiannual financial framework || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 0.917 || 6.419

Outside HEADING 5[29] of the multiannual financial framework || || || || || || || ||

Human resources || || || || || || || ||

Other expenditure of an administrative nature || || || 0.500 || || || || ||

Subtotal outside HEADING 5 of the multiannual financial framework || 0.917 || 0.917 || 1.417 || 0.917 || 0.917 || 0.917 || 0.917 || 6.919

TOTAL || 0.917 || 0.917 || 1.417 || 0.917 || 0.917 || 0.917 || 0.917 || 6.917

3.2.3.2.  Estimated requirements of
human resources

–
 ̈  The proposal/initiative does not require the use of human
resources

–
X  The proposal/initiative requires the use of
human resources, as explained below:

Estimate to be expressed in full amounts
(or at most to one decimal place)

|| Year 2014 || Year 2015 || Year 2016 || Year 2016 || 2018-2020

Ÿ Establishment plan posts (officials and temporary agents)

XX 01 01 01 (Headquarters and Commission’s Representation Offices) || 7 || 7 || 7 || 7 || 7 || 7 || 7

XX 01 01 02 (Delegations) || || || || || || ||

XX 01 05 01 (Indirect research) || || || || || || ||

10 01 05 01 (Direct research) || || || || || || ||

Ÿ External personnel (in Full Time Equivalent unit: FTE)[30]

XX 01 02 01 (CA, INT, SNE from the "global envelope") || || || || || || ||

XX 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || || || || || || ||

XX 01 04 yy [31] || - at Headquarters[32] || || || || || || ||

- in delegations || || || || || || ||

XX 01 05 02 (CA, INT, SNE - Indirect research) || || || || || || ||

10 01 05 02 (CA, INT, SNE - Direct research) || || || || || || ||

Other budget lines (specify) || || || || || || ||

TOTAL || 7 || 7 || 7 || 7 || 7 || 7 || 7

Title 01.03 – International Economic and
Financial Affairs is the policy area or budget title concerned.

The human resources required
will be met by staff from the DG who are already assigned to management of the action
and/or have been redeployed within the DG, together if necessary with any
additional allocation which may be granted to the managing DG under the annual
allocation procedure and in the light of budgetary constraints.

Description of
tasks to be carried out:

Officials and temporary agents || The main tasks arising from the proposal are the following: - Preparation of the legislative proposal, - Follow up of the legislative procedure with the European Parliament and with the Council, - Relations and communications with the EIB, notably for the preparation of the reporting, the preparation and follow-up of the guarantee and recovery agreements, the operational regional guidelines, the possible calls to the EU guarantee, - Follow-up of the EIB investment projects in the context of Article19 of Statute of the EIB, - Administration of the annual budgetary procedure and management of the Guarantee Fund, - Preparation of reporting required by the legislation.

External personnel ||

3.2.4.     Compatibility with the
current multiannual financial framework

–
X  Proposal/initiative is compatible the current
multiannual financial framework.

–
 ̈  Proposal/initiative will entail reprogramming of the relevant
heading in the multiannual financial framework.

–
 ̈  Proposal/initiative requires application of the flexibility instrument
or revision of the multiannual financial framework[33].

3.2.5.     Third-party contributions

–
X  The proposal/initiative does not provide for
co-financing by third parties

–
The proposal/initiative provides for the
co-financing estimated below:

Appropriations in EUR million (to 3 decimal places)

|| Year N || Year N+1 || Year N+2 || Year N+3 || ... enter as many years as necessary to show the duration of the impact (see point 1.6) || Total

Specify the co-financing body || || || || || || || ||

TOTAL appropriations cofinanced || || || || || || || ||

3.3.        Estimated impact on
revenue

–
 ̈  Proposal/initiative has no financial impact on revenue.

–
X  Proposal/initiative has the following
financial impact:

–
 ̈         on own resources

–
X          on miscellaneous revenue

EUR million (to 3 decimal places)

Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[34]

Year N || Year N+1 || Year N+2 || Year N+3 || ... insert as many columns as necessary in order to reflect the duration of the impact (see point 1.6)

Article ............. || || || || || || || ||

For miscellaneous
assigned revenue, specify the budget expenditure line(s) affected.

If the Guarantee Fund is above its target amount, the exceeding
amount is reversed to the general budget line.

The method for calculating the possible impact on revenue is
described in detail in part 3.2.2 above on the mechanism of the functioning of
the Guarantee Fund.

[1]               Decision
granting an EU guarantee to the European Investment Bank against losses under
loans and loan guarantees for projects outside the Union and repealing Decision
No 633/2009/EC (OJ L 280, 27.10.2011, p. 1).

[2]               SWD(2013)XX

[3]               OJ
L 145, 10.6.2009, p. 10.

[4]               OJ
L 280, 27.10.2011, p. 1.

[5]               OJ
L 145, 10.6.2009, p. 10

[6]               COM(2011)842
Final

[7]               OJ
L 298, 26.10.2012, p. 1.

[8]               COM(2011)838
Final

[9]               COM(2011)839
Final

[10]             COM(2011)840
Final

[11]             COM(2011)843
Final

[12]             COM(2011)844
Final

[13]             COM(2011)845
Final

[14]             COM(2011)841
Final

[15]             This
designation is without prejudice to positions on status, and is in line with
UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.

[16]             OJ
L 298, 26.10.2012, p. 1.

[17]             Council
Regulation (EC, Euratom) No 480/2009 of 25 May 2009 establishing a Guarantee
Fund for external actions (OJ L 145, 10.6.2009, p. 10).

[18]             ABM:
Activity-Based Management – ABB: Activity-Based Budgeting.

[19]             As
referred to in Article 49(6)(a) or (b) of the Financial Regulation.

[20]             http://www.eib.org/projects/cycle/monitoring/rem.htm

[21]             It should be noted that, if, on expiry of the current
mandate on 31 December 2013, the European Parliament and the Council have not
adopted a decision granting a new EU guarantee to the EIB for its financing
operations outside the Union, Decision 1080/2011/EU foresees that that period
shall be automatically extended by six months.

[22]             Details
of management modes and references to the Financial Regulation may be found on
the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[23]             Diff.
= Differentiated appropriations / Non-diff. = Non-Differentiated Appropriations

[24]             EFTA:
European Free Trade Association.

[25]             Candidate
countries and, where applicable, potential candidate countries from the Western
Balkans.

[26]             Technical
and/or administrative assistance and expenditure in support of the
implementation of EU programmes and/or actions (former "BA" lines),
indirect research, direct research.

[27]             Outputs
are products and services to be supplied (e.g.: number of student exchanges
financed, number of km of roads built, etc.).

[28]             As
described in Section 1.4.2. "Specific objective(s)..."

[29]             Technical
and/or administrative assistance and expenditure in support of the
implementation of EU programmes and/or actions (former "BA" lines),
indirect research, direct research.

[30]             CA=
Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune
Expert en Délégation" (Young Experts in Delegations); LA= Local Agent;
SNE= Seconded National Expert;

[31]             Under the ceiling for external personnel from operational appropriations (former "BA"
lines).

[32]             Essentially
for Structural Funds, European Agricultural Fund for Rural Development (EAFRD) and European
Fisheries Fund (EFF).

[33]             See
points 19 and 24 of the Interinstitutional Agreement.

[34]             As
regards traditional own resources (customs duties, sugar levies), the amounts
indicated must be net amounts, i.e. gross amounts after deduction of 25% for collection
costs.